US Rebalance Continues Despite Distractions

It was a rough four months for the United States. Washington has struggled to convince foreign audiences that the “rebalance” is sustainable given renewed attention to the Middle East, even before the Syrian crises. Washington did demonstrate that the “pivot” is multidimensional. On the political side, Secretary of State John Kerry made a quick fly-by for the annual ASEAN Regional Forum (ARF) ministerial, while Defense Secretary Chuck Hagel came twice, for the Shangri-La Dialogue and again for the ASEAN Defense Ministers Meeting Plus (ADMM+). On the economic side, Washington continued pressing for Trans-Pacific Partnership (TPP) negotiations, while a return visit to the Korean Peninsula by B-52s reminded Pyongyang, among others, of the military dimension. All three aspects were further underscored during Vice President Biden’s address on Asia policy, prior to his own visit to the region in July.

It isn’t clear if North Korea got the message. Kim Jong Un has continued to follow his father’s play book: first create a crisis (nuclear and missile tests), then make lots of threats, and then launch a “smile diplomacy” campaign (this time around with Seoul) aimed at diverting attention away from the real objective, which remains Korean Peninsula denuclearization. Washington stuck to its game plan, insisting on a sign of genuine sincerity before opening a new dialogue process with Pyongyang. Much as we would like to, we also cannot overlook NSA leaker extraordinaire Edward Snowden’s swing through the region and the impact of his revelations on the US standing in the world and on US relations with China in particular.

Kerry flies in (and out) for the ARF

In our last report, we argued that the new US foreign policy team would not falter in its commitment to the rebalance. So far, so good! As Hillary Clinton (or was it Woody Allen?) once said “90 percent of life is just showing up.” Some were critical of Secretary Kerry’s fly-by; unlike his predecessors, who made multiple stops in Southeast Asia during ARF-related visits (when they showed up, that is), Kerry came to Brunei after some Middle East shuttle diplomacy, with a stop in India thrown in as well. His initial plans included stops in Indonesia and Vietnam, but these were cancelled due to Syria-related consultations. But clearly the ARF visit was no afterthought. Brunei is on the way to nowhere. Yet, Kerry made a concerted effort, despite having been on the road since June 21, to make it to Brunei for the annual ministerial.

The State Department’s Fact Sheet on the visit noted that the ARF holds on average 25 events annually across several key security areas – preventive diplomacy, counterterrorism and transnational crime, disaster relief, maritime security, and nonproliferation and disarmament – further pointing out that the US “is actively engaged in all of these events and is committed to working through the ARF process to enhance peace, security, and stability in the Asia-Pacific region.” It also recognizes the ARF as “the premier regional venue for multilateral cooperation on nonproliferation and disarmament issues.”

Kerry noted that the US recognizes the history of the 21st century will be written in Asia and seeks to strengthen its economic, security, and people-to-people ties in the region: “Let me be crystal clear, I know that some people have wondered whether in the second term of the Obama administration and with a new secretary of state, we are going to continue on the path that we have been on. And the answer, I say to all of you directly, is yes. Not just yes, but we hope to increase the effort.”

As in the past, the Chairman’s Statement from the 20th ARF Ministerial supported “all efforts to bring about the denuclearization of the Korean Peninsula in a peaceful manner,” and called for “peaceful settlement of disputes through friendly consultations and negotiations,” while welcoming the “collective commitments” by China and ASEAN to effectively implement the Declaration on the Conduct of Parties in the South China Sea (DoC), while working toward a more formal code of conduct (CoC). It also “acknowledged the importance of enhancing cooperation in other regional security mechanisms,” citing in particular the need for greater coordination and cooperation between the efforts of the ARF and ADMM+.

Hagel on the point

If Kerry’s visit was fleeting, the same cannot be said for the visits by Defense Secretary Chuck Hagel. Even though the rebalance is intended to reduce the burden that the US military has assumed in US engagement in Asia, Hagel has been an indefatigable advocate and a frequent presence throughout the region. He made two trips to Asia during the last four months, and he reportedly will be making four lengthy trips to the Asia-Pacific, as a matter of course, each year. His first visit took him in late May and June to Singapore for the Shangri-La Dialogue. Hagel continued the US record of high-level attendance, using the meeting to affirm the US message of engagement and to hold sidebar meetings with counterparts from other countries. This wasn’t his first time at the Dialogue: he attended and spoke at the inaugural meeting as a US senator, heading a congressional delegation.

In his remarks, Secretary Hagel again affirmed US commitment to the rebalance, noting that ties to the region are unbreakable, but need to be “renewed and reinvigorated after a decade of war in the Middle East and Central Asia.” This does not mean, however, that the rebalance is a retreat from other regions; the US remains a global power with allies, interests and responsibilities around the world.” He identified “a range of persistent and emerging threats in the region,” which include North Korea’s nuclear weapons, missile programs and continued provocations; land and sea disputes over natural resources; natural disasters, poverty, and pandemic disease; environmental degradation; illicit trafficking in people, drugs and weapons, including the proliferation of weapons of mass destruction; and disruptive activities in space and cyberspace. The US will work with partners throughout the region to tackle those threats, an effort that will include existing alliances, new partnerships, and coalitions based on common interests. He also reassured his audience that the search for new partners represented no flagging in the US determination to remain the world’s leading military power.

While Hagel underscored the US commitment to put the majority of its overseas naval and air forces in the Asia Pacific, he also highlighted US diplomatic and economic efforts, noting increased funding for diplomacy and development in Asia; new resources for regional efforts that improve water management, disaster resilience and public health; and work to foster trade and investment through regional institutions. He stressed that the US will push regional institutions to move beyond talking about cooperation to achieving “real, tangible solutions to shared problems.” To press his point, Hagel invited the ASEAN defense ministers to Hawaii in 2014 for an informal meeting – their first such get-together in the United States.

Like his predecessors, Hagel used the opportunity of the Shangri-La Dialogue to hold bilateral and trilateral side meetings. While in Singapore, he met Singapore’s prime minister, and defense ministers from Australia, Singapore, Indonesia, Malaysia, Japan, the Republic of Korea and the Philippines, as well as Brunei’s deputy defense minister. Significantly, he held a trilateral meeting with his Japan and ROK counterparts, after which they issued a joint statement calling North Korea’s nuclear and missile provocations “serious threats” and reaffirming the value of their trilateral cooperation for promoting regional and global peace and security. At a similar trilateral with the Australian and Japanese defense ministers, the third such meeting of that group, they agreed that North Korea constitutes a serious destabilizing factor for all of East Asia and discussed opportunities for strengthening trilateral cooperation. They also agreed to conduct a joint study on defense capacity building efforts in Southeast Asia and Oceania.

The secretary was back in the region three months later, on an eight-day, four-country trip that allowed him to meet every defense minister in the region. This swing took him to Malaysia, Indonesia, Brunei, and the Philippines. The big stop was in Brunei, where he attended ADMM+. The day before that meeting, he joined the ASEAN defense ministers for lunch, where they accepted his June invitation to visit the US in 2014. In sidebars, he met again with counterparts from Japan, South Korea, Vietnam, Brunei, Burma, and China. Vietnamese Defense Minister Gen. Phung Quang Thanh invited Hagel, a decorated Vietnam War veteran, to visit Vietnam in 2014, an offer that he accepted. His brief sit down with Burma’s defense minister, Lt. Gen. Wai Lwin, was the first such bilateral meeting at the defense minister level in more than 20 years.

The ADMM+ meeting would have been considered a success even without those deliverables. The meeting noted the success of the first ADMM+ humanitarian assistance/disaster relief and military medicine exercise that was held in Brunei in June, and agreed to establish an ADMM+ Expert Working Group on Humanitarian Mine Action, an addition to the existing five expert groups on maritime security, counter-terrorism, disaster management, peacekeeping operations and military medicine. The group also agreed to meet every two years rather than every three.

Hagel’s final stop on his tour was in the Philippines, where meeting government and defense leaders on the 62nd anniversary of the signing of the US-Philippines Mutual Defense Treaty, he applauded the “unbreakable alliance” between the two countries. Topping his to-do list was working on the outline of a new framework agreement that would allow US forces to operate in Philippine territory and waters on a rotational basis and to help build local capacity in maritime security. He dismissed claims that the US sought new bases in the Philippines, calling that “an outdated Cold War mentality. Instead, we are using a new model of military-to-military cooperation befitting two great allies and friends.”

Economic smackdown? TPP v RCEP

We continue to believe that the rebalance is a genuine attempt to reallocate resources within Asia, not merely between theaters. The talk about putting more emphasis on political and economic engagement isn’t empty rhetoric and the time and energy devoted to trade negotiations helps make that point. Exhibit A for the US effort to broaden engagement with the region is the Trans-Pacific Partnership free trade agreement. Negotiations progressed this summer and participants insist that a deal that sets a global gold standard for trade deals can be concluded by yearend. The TPP now includes 12 countries – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam – and accounts for about 40 percent of global wealth and a third of world trade.

The big news this summer was Japan’s entrance to the negotiations, despite doubts about Tokyo’s commitment to the trade deal that the other partners seek. While Prime Minister Shinzo Abe surprised many with his decision early in the year to join the TPP talks, his party (and his country) remain divided on the merits. Many fear that Tokyo will be more focused on protecting certain economic sectors than pushing for the deregulation and market opening that the TPP is supposed to provide. To his credit, Abe (along with many of his economic advisors) know that economic reform is fundamental to the prime minister’s mantra that “Japan is back.”

Japan became a formal member of the TPP in July, just before the conclusion of the 18th round of talks that were held July 15-25 in Malaysia. Tokyo’s negotiators missed out on most of the important meetings; the sessions they did join were mostly devoted to briefings on the current state of negotiations and providing background information on accord texts. Despite its late ascension to the talks and the concerns it has, Japanese officials told Malaysian counterparts that they would not delay the talks and they too are committed to a yearend deadline.

That commitment was tested at the 19th round of negotiations, held Aug. 23-30 in Brunei. TPP ministers started off that get-together with a show of political support for the talks and tried to close some gaps on sensitive issues by providing guidance to their negotiators. Reportedly, the ministerial meeting tackled the idea of “landing zones” for more contentious issues and sequencing of some topics as negotiations reach their end stages.

Once again, the Brunei round marked progress. According to the statement released at its conclusion, the “discussions both jointly and bilaterally were successful in identifying creative and pragmatic solutions to many issues and further narrowing the remaining work.” Negotiators made progress on market access, rules of origin, investment, financial services, intellectual property, competition, government procurement, and the environment. It concluded that “the majority of issues are now at an advanced stage.”

Future discussions will be “inter-sessional” meetings that focus on issues from just one or two of the 21 working groups. As negotiators work together on specific issues, participants will be engaging bilaterally to work out details as well. The next target date is a TPP Leaders Summit that is expected to convene in conjunction with the APEC Leaders Meeting that will be held in Bali, Indonesia in early October.

Meanwhile, negotiators for the other big Asia-Pacific trade pact, the Regional Comprehensive Economic Partnership (RCEP) met as well. RCEP consists of the ASEAN Plus Three nations (the ASEAN 10, China, Japan and South Korea) plus three free trade agreement partners (Australia, India, and New Zealand), and includes more than 3 billion people, has a combined GDP of about $17 trillion, and accounts for about 40 percent of world trade. It is currently set to conclude at the end of 2015.

The RCEP was launched last November; the first meeting of the Trade Negotiating Committee convened in Brunei May 9-13, 2013. The statement they released included boilerplate, calling for a “modern, comprehensive, high-quality and mutually beneficial economic partnership agreement establishing an open trade and investment environment in the region to facilitate the expansion of regional trade and investment and contribute to global economic growth and development” and said that it will be designed to “boost economic growth and equitable economic development, advance economic cooperation and broaden and deepen integration in the region through the RCEP, which will build upon our existing economic linkages.”

In contrast to the TPP, the RCEP explicitly acknowledges the role of “ASEAN centrality” in the emerging regional economic architecture and notes that it will produce an agreement that entails “broader and deeper engagement with significant improvements over the existing ASEAN+1 FTAs.” That isn’t quite a gold standard, but it is progress nevertheless. The next round of RCEP negotiations is scheduled to be held Sept. 23-27 in Australia.

There is a common misperception that the TPP and RCEP are competing economic models, promoting different versions of an Asian economic order: the TPP is trans-Pacific with the US at its core, while the RCEP advances a more Asian design, one that would put China at its center. Many also believe that TPP was established as a counter to that China-centered Asian economic model, and represents an attempt to somehow contain China. Protests that this isn’t true and that TPP is open to all who qualify and have an interest have often fallen on deaf ears. More to the point, TPP predates US involvement and several countries are in both groups. Nevertheless, the charge that TPP represents some grand US design to maintain its regional pre-eminence and choke off rivals persists: why let facts get in the way of a good talking point?

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